The Stupidity of Bank of America’s Short Sale Department

What do you do when market values are declining and buyers are scarce? Why, decide to only accept offers more than 20% above current market value!

That, my friends, is the logic of the Bank of America short sale department. And that, by extension, is why I can’t urge buyers enough to stay away from short sale homes if they’re serious about purchasing.

Just one month ago, B of A decided the market value of a home I had listed was $97,000 and told me so. So I put it on the market for the $97,000 and received an offer at $91,000. Lo and behold, at the end of three weeks’ time, B of A had determined the value of the house now was $110,000 – the same figure they had given more than six months ago.

And so we appeal the valuation only to be told that B of A only will consider a revaluation if the offer is less than 20 percent of what the geniuses at the bank have determined market value to be. So, the fact that B of A is 18 percent market value doesn’t matter; they’re not 20 percent over, so in the minds of the morons they are correct.

And so all the average sales prices for the area mean nothing …

And so the recent sales of model matches at fractions not just of the $110,000 but also of the $91,000 offered mean nothing …

And so the statistics that show banks lose less by agreeing to a short sale versus a foreclosure mean nothing …

And so the reality that this same home, after foreclosure, will be put on the market for less than the current offer amount, means nothing …

And so the so-called expedited time frames mean nothing, because the answer at the end is little more than gibberish …

But hey. The appraiser Bank of America used got paid, even if the value provided to Bank of America is thoroughly indefensible.

Whatever.

Many of my colleagues have turned short sale listings into their niche. And I say more power to them. I’ll be happy to refer you the listings. Because for my money, I’ll take second-home buyers and Canadians any day – even if their timeframe is years out – rather than deal with the utter stupidity of the short sale department at Bank of America and these other lenders.

7 Comments

I received an email yesterday form a short sale resource. This person attended a meeting with BofA. Their stance is, since they have streamlined their short sale process, they do not feel the need to accept less than FMV.

I think their definition of streamlined is quite different than anyone else’s.

It may be a great time to be an REO broker though – cause they are going to have a *LOAD* of REO’s.

kim 7 years ago

I’ve got one for you, have a short sale going with GMAC. The BPO came in at $281,500. The negotiator told me that if she takes a $281,500 offer she will make less money on the sale vs foreclosing. How does that one make sense? She wants to spend money to foreclose, value is $281,500 and she thinks she will make more foreclosing and then reselling? Someone needs to explain this one to me.

Not all short sales are created equal, obviously those from BofA are less equal than others. And I’ll help someone buy a lender owned property any day given the choice.

Another Investor 7 years ago

Short sales can be good deals, but stay away from Bank of Ameriwide. I don’t even bother with making offers if it’s B of A. I pity the homeowners that think they are going to get a loan modification or a short sale if B of A is the lender.

REO’s aren’t always a good alternative, however. Fannie seems to be consistently 10 percent above FMV. And they are smug about it, even after the properties have been on the market 100 days.

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